Imagine the pass we would have reached if the future of Britain turned on elections for Coventry city council. The eurozone has reached a comparable position, as the eyes of a continent trained on a ballot in one small corner of a vast economy, representing a mere 3% of the total. The choice of a government is of natural importance to the 11 million Greeks. But one weird consequence of the zone's lethal rigidity is that world statesmen, financial colossuses and fearful millions beyond all got obsessed with Sunday's knife-edge vote.

Greeks waited on Sunday night to learn if two, three or four points separated the conservative New Democracy from the leftist Syriza, but the important numbers for daily life are no longer measured in percentages. They come in great ugly fractions – the full one-fifth of output that has gone up in smoke, the quarter that has been hacked off many pensions and the half of young adults who are unemployed. As the world found out the hard way in the 1930s and is now discovering afresh, there is quite simply a limit to how much austerity people will swallow. The Greeks reject the strangulation of livelihood that they can see all around them, but are also determined to cling to the euro and avoid lurching back to a Balkan past. To survive, the big parties had to fit themselves around these basic contours.

After all, Sunday confirmed the collapse of social democracy in the form of Pasok and also saw a substantial vote sustained for the neo-Nazis of Golden Dawn. Despite being led by the divisive Antonis Samaras, ND thus felt obliged to demand a sweetening of the harsh bailout which it has championed. Even then, it ended down several points on its bad loss of 2009. If it is victory, it's not victory as we know it – hence the immediate spin about a grand coalition. Syriza, meanwhile, which in 2009 was a fringe coalition of malcontents ranging from Greens to Trotskyites, has toned down its Brussels bashing. Its charismatic leader, Alexis Tsipras, penned FT op-eds swearing to stick in the euro, as he trod a path from obscurity to the brink of victory in a couple of months.

Europe's north will soon have to choose between renegotiating so the oxygen of liquidity can flow on less ruinous terms, or else standing back and watching the Greek banks go bust with a bang. Take the second course, and the amputation of the euro's first limb will follow. After this month's Spanish bank rescuefailed to soothe market nerves, the immediate question would then be "who next?". A currency of supposedly eternal integrity could be rapidly dismembered. After a campaign whose only effect was to deepen the ND-Syriza faultline by drawing support from elsewhere to both sides of this divide, the two main parliamentary caucuses are bigger. Beyond that, it was unclear what had changed – there's no majority, no platform for stable government, still less any prospect of early recovery.

Having previously intervened to try and frustrate the arrival of a new French president, who on Sunday cemented his power in the National Assembly, Angela Merkel saw fit to hector the Greeks ahead of the vote. The German chancellor's understandable aim may have been capping the huge bailout costs, but the close vote does not suggest this was wise. A campaign of fear may just have secured the sort of supplicant Europe is used to doing business with, but it will not for long avoid a renegotiation, still less achieve anything more enduring. The grip of a new government with a shaky mandate will not be aided by fears of financial subjugation taking a political turn.

At home, George Osborne is deep in the danger zone he once boasted he had got Britain out of. At the Mansion House last week, he proclaimed "new firepower" in the face of the "crisis on our doorstep". But the coming days could do for lingering hopes of an island nation remaining an island of economic tranquillity. Across the continent, the last best hope is the old, dormant doctrine of ever-closer union. It is more likely to be a case of never-closer union if integration acquires the taint of domination, as opposed to partnership.